It’s starting to look like Christmas – a time for tax-effective giving

Christmas is traditionally a time for giving including showing your team and clients a token of your appreciation.

It is also a time of festivities and lots of dining. With the right approach it is possible to provide these with no FBT.

However, this area of law if complex. So we provide our gift to you – a quick ready reckoner as to the tax treatment of Christmas giving.

Notes:

The above implications are relevant only when the “actual method” is used for valuing entertainment benefits for FBT purposes. The minor benefit and in-house property exemptions do not apply where the 50/50 method is used.

The minor benefit threshold of less than $300 (incl. GST) applies to each benefit provided. We note for completeness that in order for a benefit to qualify as an exempt minor benefit, the benefits provided must also be infrequent and irregular in nature.

Where an employer is travelling for business purposes and attends Christmas functions, the FBT implications may differ from the above table.

The above table is a summary of the FBT implications and is not intended to be used as professional tax advice. We recommend you seek professional advice specific to your situation.